exv10w1



 





Exhibit 10.1




	 	 	 
	MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE, FENNER &

SMITH INCORPORATED

4 World Financial Center

New York, New York 10080
	 	MERRILL LYNCH CAPITAL CORPORATION

4 World Financial Center

New York, New York 10080








June 16, 2004



Senior Credit Facility

Commitment Letter




Atmos Energy Corporation

5430 LBJ Freeway

Dallas, TX 75240

Attention: J. Patrick Reddy



Ladies and Gentlemen:




     You have advised Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated (collectively, “ML”) and Merrill Lynch Capital Corporation
(“Merrill”; together with ML, the “Commitment Parties”) that you or one or more
of your affiliates proposes to effect the Acquisition more specifically
described in the Term Sheet referred to below (the term “Acquisition” and each
other capitalized term used but not defined herein being given the meaning
assigned to such term in the Term Sheet). In such connection, you have
requested that ML agree to structure, arrange and syndicate a senior credit
facility in an aggregate amount of $1,925,000,000 (the “Credit Facility”) and
that Merrill commit to provide the entire principal amount of the Credit
Facility and to serve as administrative agent for the Credit Facility. The
Credit Facility will be used to (i) finance, or backstop the issuance of
commercial paper to finance, the Acquisition and (ii) pay fees and expenses
incurred in connection with the Acquisition.



     ML is pleased to advise you that it is willing to act as the sole lead
arranger and sole bookrunner for the Credit Facility, and Merrill is pleased to
advise you of its commitment to provide the entire amount of the Credit
Facility. This Commitment Letter and the Summary of Terms and Conditions
attached as Exhibit A hereto (the “Term Sheet”) set forth the principal terms
and conditions on and subject to which Merrill is willing to make available the
Credit Facility.



 









 





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     It is agreed that ML will act as the sole lead arranger and sole
bookrunner in respect of the Credit Facility (in such capacities, the
“Arranger”) and that Merrill will act as the sole administrative agent in
respect of the Credit Facility. You agree that, as a condition to the
commitments and agreements hereunder, no other agents, co-agents or arrangers
will be appointed, no other titles will be awarded, and no compensation (other
than that expressly contemplated by the Term Sheet and the Fee Letter referred
to below) will be paid in connection with the Credit Facility unless you and we
shall so agree.



     We intend to syndicate the Credit Facility to a group of lenders (together
with Merrill, the “Lenders”) identified by us in consultation with you and to
commence such syndication efforts promptly following execution of a definitive
agreement with respect to the Acquisition. You agree to assist us actively in
completing a syndication satisfactory to us. Such assistance shall include (a)
your using commercially reasonable efforts to ensure that the syndication
efforts benefit materially from your existing banking relationships, (b) direct
contact between senior management and advisors of you and, to the extent
practicable, TXU Gas and the proposed Lenders, (c) assistance in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and (d) the hosting,
with us, of one or more meetings of prospective Lenders. You also agree to
provide us with reasonable prior notice of the syndication of any credit
facility in connection with any other investment by you and, upon our
reasonable request, coordinate the syndication of such credit facility with the
syndication of the Credit Facility.



     ML, in its capacity as Arranger, will manage, in consultation with you,
all aspects of the syndication, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the
allocation of the commitments among the Lenders and the amount and distribution
of fees among the Lenders, provided that the identity of the Lenders and the
amount of their commitments shall be subject to your consent (not to be
unreasonably withheld). In its capacity as Arranger, ML will have no
responsibility other than to arrange the syndication as set forth herein and in
no event shall be subject to any fiduciary or other implied duties. To assist
us in our syndication efforts, you agree promptly to prepare and provide to us
all information with respect to you and your subsidiaries, TXU Gas and its
subsidiaries, the Acquisition and the other transactions contemplated hereby,
including all financial information and projections (the “Projections”), as we
may reasonably request in connection with the arrangement and syndication of
the Credit Facility, except that you shall not be obligated to provide any
information that is otherwise publicly available in SEC filings. At our
request, you agree to assist in the preparation of a version of the information
package and presentation consisting exclusively of information and
documentation that is either publicly available or not material with respect to
you and any of your securities for purposes of United States federal and state
securities laws. You hereby represent and covenant that (a) all written
information other than the Projections (all such non-excluded information, the
“Information”) that has been or will be made available to us by you or any of
your representatives is or will be, when furnished, when taken together with
all information filed with the Securities and Exchange Commission with respect
to the Borrower, TXU Gas and their respective subsidiaries, complete and
correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and



 









 





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(b) the Projections that have been or will be made available to us by you
or any of your representatives have been or will be prepared in good faith
based upon reasonable assumptions (it being understood that projections are
subject to significant uncertainties and contingencies, many of which are
beyond your control, and that no assurance can be given that any projections
will be realized). You understand that in arranging and syndicating the Credit
Facility we may use and rely on the Information and Projections without
independent verification thereof.



     As consideration for the commitments and agreements of the Commitment
Parties hereunder, you agree to cause to be paid the nonrefundable fees
described in the Fee Letter dated the date hereof and delivered herewith (the
“Fee Letter”).



     Each Commitment Party’s commitments and agreements hereunder are subject
to (a) there not occurring or becoming known to such Commitment Party any
event, development or circumstance that has had a material adverse effect on
the business or assets of you and your subsidiaries (after giving effect to the
Acquisition) taken as a whole, (b) such Commitment Party not becoming aware
after the date hereof of any information or other matter (including any matter
relating to financial models and underlying assumptions relating to the
Projections) affecting you, TXU Gas or the Acquisition that in such Commitment
Party’s judgment is inconsistent in a material and adverse manner with any such
information or other matter disclosed to such Commitment Party prior to the
date hereof and could reasonably be expected to materially impair the
syndication of the Credit Facility, (c) such Commitment Party’s satisfaction
that prior to and during the syndication of the Credit Facility there shall be
no competing offering, placement or arrangement of any debt securities (other
than the senior notes the proceeds of which will, as provided in the Term
Sheet, reduce the amount of the Credit Facility, offerings of your commercial
paper as provided in the Term Sheet and the syndication of the Renewal
Facility) or bank financing by or on behalf of the Borrower or any of its
subsidiaries, (d) the closing of the Credit Facility on or before December 31,
2004 (or, with the consent of each of the Commitment Parties, up to 90 days
beyond such date, but only to the extent (and for the duration) that TXU Gas
has elected to extend the date for closing the Acquisition pursuant to the
Acquisition Documentation in connection with the repair or replacement of
assets damaged or destroyed by a casualty event), and (e) the other conditions
set forth or referred to in the Term Sheet. The terms and conditions of the
commitments hereunder and of the Credit Facility are not limited to those set
forth herein and in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of the Commitment Parties and the Borrower.



     You agree to indemnify and hold harmless the Commitment Parties, their
affiliates and their respective officers, directors, employees, advisors, and
agents (each, an “indemnified person”) from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with any claim, litigation,
investigation or proceeding relating to this Commitment Letter, the Credit
Facility, the use of the proceeds thereof, the Acquisition or any related
transaction, regardless of whether any indemnified person is a party thereto,
and to reimburse each indemnified person upon demand for any legal or other
expenses incurred in connection with investigating or defending any of the
foregoing; provided that the foregoing indemnity will not, as to any
indemnified person, apply to losses, claims, damages, liabilities or related
expenses to the extent they arise from the willful misconduct or gross
negligence of such indemnified person, and to



 









 





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reimburse each Commitment Party and its affiliates promptly after demand
for all reasonable out-of-pocket expenses (including reasonable due diligence
expenses, syndication expenses, and reasonable fees, charges and disbursements
of one firm of counsel) incurred in connection with the Credit Facility and any
related documentation (including this Commitment Letter, the Term Sheet, the
Fee Letter and the definitive financing documentation) or the administration,
amendment, modification or waiver thereof. No indemnified person shall be
liable for any damages arising from the use by others of Information or other
materials obtained by unauthorized means through electronic, telecommunications
or other information transmission systems or for any special, indirect,
consequential or punitive damages in connection with the Credit Facility except
to the extent any such damages arise from the gross negligence or willful
misconduct of such indemnified person or such indemnified person’s affiliates,
directors, employees, advisors or agents.



     You agree that, without our prior written consent, neither you nor any of
your affiliates or subsidiaries will settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding in
respect of which indemnification has been or could be sought under the
indemnification provisions hereof (whether or not any other indemnified person
is an actual or potential party to such claim, action or proceeding), unless
such settlement, compromise or consent (a) includes an unconditional written
release of each indemnified person in form and substance satisfactory to the
indemnified person from all liability arising out of such claim, action or
proceeding and (b) does not include any statement as to or an admission of
fault, culpability or failure to act by or on behalf of any indemnified person.



     In the event that an indemnified person is requested or required to appear
as a witness in any action brought by or on behalf of or against you or any of
your subsidiaries or affiliates in which such indemnified person is not named
as a defendant, you agree to reimburse such indemnified person for all expenses
incurred by it in connection with such indemnified person’s appearing and
preparing to appear as such a witness, including without limitation, the
reasonable fees and expenses of its legal counsel.



     You acknowledge that each Commitment Party and its affiliates (the term
“Commitment Party” as used below in this paragraph being understood to include
such affiliates) may be providing debt financing, equity capital or other
services (including financial advisory services) to other companies in respect
of which you may have conflicting interests regarding the transactions
described herein and otherwise. No Commitment Party will use confidential
information obtained from you by virtue of the transactions contemplated hereby
or its other relationships with you in connection with the performance by such
Commitment Party of services for other companies, and no Commitment Party will
furnish any such information to other companies. You also acknowledge that no
Commitment Party has any obligation to use in connection with the transactions
contemplated hereby, or to furnish to you, confidential information obtained
from other companies. You further acknowledge that ML is a full service
securities firm and ML may from time to time effect transactions, for its own
or its affiliates’ account or the account of customers, and hold positions in
loans, securities or options on loans or securities of the Borrower and its
affiliates and of other companies that may be the subject of the transactions
contemplated by this Commitment Letter.



 









 





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     Each Commitment Party may employ the services of its affiliates in
providing certain services hereunder and, in connection with the provision of
such services, may exchange with such affiliates information concerning you and
the other companies that may be the subject of the transactions contemplated by
this Commitment Letter, and, to the extent so employed, such affiliates shall
be entitled to the benefits afforded such Commitment Party hereunder.



     This Commitment Letter shall not be assignable by you without the prior
written consent of each Commitment Party (and any purported assignment without
such consent shall be null and void), is intended to be solely for the benefit
of the parties hereto and is not intended to confer any benefits upon, or
create any rights in favor of, any person other than the parties hereto and the
indemnified persons. This Commitment Letter may not be amended or waived
except by an instrument in writing signed by you and each Commitment Party.
This Commitment Letter may be executed in any number of counterparts, each of
which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. This Commitment Letter and the Fee
Letter are the only agreements that have been entered into among us with
respect to the Credit Facility and set forth the entire understanding of the
parties with respect thereto. This Commitment Letter shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New
York.



     To help the United States government fight the funding of terrorism and
money laundering activities, the federal law of the United States requires all
financial institutions to obtain, verify and record information that identifies
each person with whom they do business. This means we must ask you for certain
identifying information, including a government-issued identification number
(e.g., a U.S. taxpayer identification number) and such other information or
documents that we consider appropriate to verify your identity, such as
certified articles of incorporation, a government-issued business license, a
partnership agreement or a trust instrument.



     This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person (including, without limitation, other potential providers or
arrangers of financing) except (a) to your officers, agents and advisors and,
on a confidential basis, those of TXU Corp. (the “Seller”), who are directly
involved in the consideration of this matter (except that the Fee Letter may
not be disclosed to the Seller or any of its officers, agents or advisors) or
(b) as may be compelled in a judicial or administrative proceeding or as
otherwise required by law (in which case you agree to inform us promptly
thereof), provided, that the foregoing restrictions shall cease to apply
(except in respect of the Fee Letter and its terms and substance) after this
Commitment Letter has been accepted by you. You agree that you will permit us
to review and approve any reference to any of us or any of our affiliates in
connection with the Credit Facility or the transactions contemplated hereby
contained in any press release or similar public disclosure prior to public
release. You agree that we and our affiliates may share information on a
confidential basis concerning you, TXU Gas and your and TXU Gas’ respective
subsidiaries and affiliates among ourselves solely in connection with the
performance of our services hereunder and the evaluation and consummation of
the financings and transactions contemplated hereby.



 









 





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     The compensation, reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter and any other provision
herein or therein which by its terms expressly survives the termination hereof
or thereof shall remain in full force and effect regardless of whether
definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or the commitments
hereunder.



     If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter not later
than 5:00 p.m., New York City time, on June 17, 2004. This offer will
automatically expire at such time if we have not received such executed
counterparts in accordance with the preceding sentence.



 









 





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     We are pleased to have been given the opportunity to assist you in
connection with this important financing.

	 	 	 	 	 
	 	Very truly yours,





MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

 	 
	 	By:  	/s/ SHEILA MCGILLICUDDY
 	 
	 	 	Name:  	Sheila McGillicuddy 	 
	 	 	Title:  	Director 	 
	 
	 	MERRILL LYNCH CAPITAL CORPORATION

 	 
	 	By:  	/s/ CAROL J.E. FEELEY
 	 
	 	 	Name:  	Carol J.E. Feeley 	 
	 	 	Title:  	Vice President
Merrill Lynch Capital Corp. 	 
	 




Accepted and agreed to

as of the date first

written above by:



ATMOS ENERGY CORPORATION



	 	 	 	 	 	 	 
	By:	 	/s/ J. PATRICK REDDY
	 	 	Name: J. Patrick Reddy
	 	 	Title: Senior Vice President and
	

	 	 	 	 	 	     Chief Financial Officer








 










 




Exhibit A



SENIOR CREDIT FACILITY

Summary of Terms and Conditions







I. PARTIES



	 	 	 
	Borrower:

	 	Atmos Energy Corporation (the
“Borrower”).
	 
	Lead Arranger
and Bookrunner:

	 	Merrill Lynch & Co. or one of its affiliates
(collectively, the “Arranger” or “ML”).
	 
	Administrative Agent:

	 	A Lender (as defined below) to be agreed upon
(in such capacity, the “Administrative Agent”).
	 
	Lenders:

	 	A syndicate of banks, financial institutions
and other entities, including Merrill Lynch
Capital Corporation (“Merrill”) and Merrill
Lynch Bank (USA) (“MLBUSA”), arranged by the
Arranger (collectively, the “Lenders”).






II. TYPE AND AMOUNT OF
CREDIT FACILITY



	 	 	 
	Type and Amount:

	 	364-day revolving credit facility
(the “Credit
Facility”) in the amount of $1,925,000,000 (the
loans made by the Lenders thereunder, the
“Loans”).
	 
	Availability:

	 	The Credit Facility shall be available during
the period commencing on the Closing Date (as
defined below) and ending on the date that is
364 days thereafter (the “Termination Date”).
	 
	Maturity:

	 	The Termination Date.
	 
	Purpose:

	 	The Credit Facility will be used to (i)
finance, or backstop the issuance of commercial
paper to finance, the acquisition (the
“Acquisition”) from TXU Corp. of certain assets
(the “TXU Assets”) and assumed related
liabilities of TXU Gas Company (“TXU Gas”) and
(ii) pay fees and expenses incurred in
connection with the Acquisition.
	 
	Ranking:

	 	The Loans shall constitute senior unsecured
debt of the Borrower.





 







 



2


III. CERTAIN PAYMENT
PROVISIONS



	 	 	 
	Fees and Interest Rates:

	 	As set forth on Annex I.
	 
	Optional Prepayments and
Commitment Reductions:

	 	Loans may be prepaid and commitments may be
reduced by the Borrower in minimum amounts of
$10,000,000. Amounts prepaid may not be
reborrowed.
	 
	Mandatory Prepayments
and Commitment Reductions:

	 	The following amounts shall be applied to
reduce permanently the Credit Facility: 100% of
the net cash proceeds of (x) any sale or
issuance of equity or equity-linked securities
by the Borrower to persons other than
affiliates (with exceptions for issuances under
employee benefit plans and other exceptions to
be agreed) or (y) any incurrence of
indebtedness by the Borrower to persons other
than affiliates (with exceptions for sales of
commercial paper, borrowings under the
currently existing 364-day credit agreement of
the Borrower (or any extension or refinancing
thereof), purchase money financings and
capitalized leases and other exceptions to be
agreed upon) after the Closing Date.
	 
	

	 	The Loans shall be prepaid to the extent they
exceed the Credit Facility as so reduced.
	IV.
CERTAIN CONDITIONS
	 	 
	 
	Initial Conditions:

	 	The availability of the Credit Facility shall be
conditioned upon satisfaction of, among other
things, the following conditions precedent (the
date upon which all such conditions shall be
satisfied, the “Closing Date”) on or before
December 31, 2004 (or, with the consent of each
of Merrill and ML, up to 90 days beyond such
date, but only to the extent (and for the
duration) that TXU Gas has elected to extend the
date for closing the Acquisition pursuant to the
Acquisition Documentation (as defined below) in
connection with the repair or replacement of
assets damaged or destroyed by a casualty
event):
	 
	

	 	(a) The Borrower shall have executed and
delivered reasonably satisfactory definitive
financing documentation with respect to the
Credit Facility (the “Credit Documentation”)
containing the terms set forth in, but not
limited to, this Term Sheet.












 


3



	 	 	 
	

	 	(b) The Lenders, the Administrative Agent and the
Arranger shall have received all fees required to
be paid on, and all expenses for which invoices
have been presented at least one business day
before and are required to be paid on, the
Closing Date.
	 
	

	 	(c) The Lenders shall have received such legal
opinions (including opinions (i) from counsel to
the Borrower and (ii) from such special and local
counsel as may be reasonably required by the
Arranger), documents and other instruments as are
customary for transactions of this type or as
they may reasonably request.
	 
	

	 	(d) The Acquisition shall have been consummated
for an aggregate purchase price not exceeding
$1,925,000,000 pursuant to reasonably
satisfactory documentation (the “Acquisition
Documentation”) (it being confirmed that the
draft delivered to Merrill (draft dated June 16,
2004) is satisfactory), and no provision thereof
shall have been waived, amended, supplemented or
otherwise modified in a manner adverse to the
Lenders without the consent of the Arranger (not
to be unreasonably withheld). The fees and
expenses to be incurred in connection with the
Acquisition shall not exceed $15,000,000 in the
aggregate.
	 
	

	 	(e) The Borrower shall have entered into a credit
facility (the “Renewal Facility”), which shall
renew or replace its existing 364-day revolving
credit facility, dated as of July 29, 2003 with
Bank One, N.A. in an amount equal to the existing
commitment under such facility (or such other
amount reasonably acceptable to the
Administrative Agent).
	 
	Conditions to Each Loan:

	 	The making of each Loan shall be conditioned upon:
	

	 	(a) the accuracy of all representations and warranties
in the Credit Documentation and (b) there being no default
or event of default in existence at the time of, or after
giving effect to the making of, such Loan.







V. CERTAIN DOCUMENTATION MATTERS



	 	 	 
	

	 	The Credit Documentation shall contain
representations, warranties, covenants and events
of default customary for financings of this type
to be applicable to the Borrower and its
subsidiaries and other customary terms deemed
appropriate by the Lenders, including those set
forth below. In this connection, the parties
agree that, if the executed












 


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	 	Renewal Facility
contains terms and conditions of a type described
in the preceding sentence that are different from
those set forth below, they will negotiate in
good faith to determine the extent to which it is
appropriate to modify the terms and conditions
set forth below to conform them to those set
forth in the Renewal Facility.
	 
	Representations and Warranties:

	 	Organization and good standing; due
authorization; no conflicts; consents; enforceable obligations; financial
condition; no material change; no default; litigation; taxes; compliance
with law; material agreements; ERISA; use of proceeds; government
regulation; disclosure; environmental matters; insurance; franchises,
licenses, etc. secured indebtedness; and subsidiaries.
	 
	Affirmative Covenants:

	 	Information covenants; debt to
capitalization ratio; preservation of
existence, franchises and assets; books
and records; compliance with law; payment
of taxes and other indebtedness;
insurance; use of proceeds; and
audits/inspections
	 
	Negative Covenants:

	 	Limitations on: nature of business;
consolidation and merger; sale or lease of
assets; non-arm’s-length transactions;
changes in fiscal year; changes in
organization documents; and liens.
	 
	Events of Default:

	 	Nonpayment of principal when due;
nonpayment of interest, fees or other
amounts after a one-day grace period;
material inaccuracy of representations and
warranties; violation of covenants
(subject, in the case of certain
covenants, to a 5-day grace period and, in
the case of certain other covenants, to a
30-day grace period); cross-default;
bankruptcy events; certain ERISA events;
judgments; and a change of control.
	 
	Voting:

	 	Amendments and waivers with respect to the
Credit Documentation shall require the
approval of Lenders holding not less than
a majority of the aggregate amount of the
Loans and unused commitments under the
Credit Facility, except that (a) the
consent of each Lender directly affected
thereby shall be required with respect to
(i) reductions in the amount or extensions
of the scheduled date of final maturity of
any Loan, (ii) reductions in the rate of
interest or any fee or extensions of any
due date thereof and (iii) increases in
the amount or extensions of the expiry
date of any Lender’s commitment and (b)
the consent of












 


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	 	100% of the Lenders shall
be required with respect to modifications
to any of the voting percentages.
	 
	Assignments and Participations:

	 	The Lenders shall be permitted to assign
and sell participations in their Loans and
commitments, subject, in the case of
assignments (other than to another Lender
or to an affiliate of a Lender), to the
consent of the Administrative Agent and
the Arranger and, so long as no event of
default shall have occurred and be
continuing, the Borrower (which consent in
each case shall not be unreasonably
withheld or delayed). In the case of
partial assignments (other than to another
Lender or to an affiliate of a Lender),
the minimum assignment amount shall be
$3,000,000, unless otherwise agreed by the
Borrower and the Administrative Agent and
the Arranger. Participants shall have the
same benefits as the Lenders with respect
to yield protection and increased cost
provisions. Voting rights of participants
shall be limited to certain matters with
respect to which the affirmative vote of
the Lender from which it purchased its
participation would be required as
described under “Voting” above. Pledges
of Loans in accordance with applicable law
shall be permitted without restriction.
	 
	Yield Protection:

	 	The Credit Documentation shall contain
customary provisions (a) protecting the
Lenders against increased costs or loss of
yield resulting from changes in reserve,
tax, capital adequacy and other
requirements of law and from the
imposition of or changes in withholding or
other taxes and (b) indemnifying the
Lenders for “breakage costs” incurred in
connection with, among other things, any
prepayment of a Eurodollar Loan (as
defined in Annex I) on a day other than
the last day of an interest period with
respect thereto.
	 
	Expenses and Indemnification:

	 	The Borrower shall pay (a) all reasonable
out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the
Credit Facility and the preparation,
execution, delivery and administration of
the Credit Documentation and any amendment
or waiver with respect thereto (including
the fees, disbursements and other charges
of counsel) and (b) all reasonable
out-of-pocket expenses of the
Administrative Agent, the Arranger and the
Lenders (including the fees, disbursements
and other charges of counsel) in
connection with the enforcement of the
Credit Documentation.












 


6



	 	 	 
	

	 	The Administrative Agent, the Arranger and the
Lenders (and their affiliates and their
respective officers, directors, employees,
advisors and agents) will have no liability for,
and will be indemnified and held harmless
against, any losses, claims, damages, liabilities
or expenses incurred in respect of the financing
contemplated hereby or the use or the proposed
use of proceeds thereof, except to the extent
they arise from the gross negligence or willful
misconduct of the indemnified party.
	 
	Governing Law and Forum:

	 	State of New York.
	 
	Counsel to the Administrative
Agent and the Arranger:

	 	Simpson Thacher & Bartlett LLP.









 



Annex I


INTEREST AND CERTAIN FEES




	 	 	 
	Interest Rate Options:

	 	The Borrower may elect that the Loans comprising each
borrowing bear interest at a rate per annum equal to (i) the ABR plus the
Applicable Margin or (ii) the Eurodollar Rate plus the Applicable Margin.
	 
	

	 	As used herein:
	 
	

	 	“ABR” means the higher of (a) the rate of
interest publicly announced by the Administrative
Agent as its prime rate in effect at its
principal office in New York City (the “Prime
Rate”) and (b) the federal funds effective rate
from time to time plus 0.5%.
	 
	

	 	“Applicable Margin” means a rate per annum
determined in accordance with the attached
Pricing Schedule.
	 
	

	 	“Eurodollar Rate” means the rate (adjusted for
statutory reserve requirements for eurocurrency
liabilities) for eurodollar deposits for a period
equal to one, two, three or six months (as
selected by the Borrower) appearing on Page 3750
of the Telerate screen.
	 
	Interest Payment Dates:

	 	In the case of Loans bearing interest based upon the
ABR (“ABR Loans”), quarterly in arrears.
	 
	

	 	In the case of Loans bearing interest based upon
the Eurodollar Rate (“Eurodollar Loans”), on the
last day of each relevant interest period and, in
the case of any interest period longer than three
months, on each successive date three months
after the first day of such interest period.
	 
	Commitment Fees:

	 	The Borrower shall pay a commitment fee calculated at a
rate per annum determined in accordance with the
attached Pricing Schedule on the unused commitments
under the Credit Facility, payable quarterly in arrears.
	 
	Utilization Fees:

	 	For each day that the principal amount of the
outstanding Loans exceeds 33 1/3% of the Credit Facility
then in effect the Borrower shall pay to the Lenders a
utilization fee on the then outstanding Loans at the
rate per annum determined in accordance with the
attached Pricing Schedule, payable quarterly in arrears.
	 
	Additional Fee:

	 	If any Loans shall be outstanding on the date which is
six months after the Closing Date the Borrower shall pay
a fee













 


2



	 	 	 
	

	 	to each Lender in an amount equal to 0.05% of such Lender’s Loans outstanding on such date.
	 
	Default Rate:

	 	At any time when an event of default exists, the principal of and interest on
the Loans and all other amounts payable under the Credit Documentation shall
bear interest at a rate per annum equal to 2% above the rate otherwise
applicable thereto (or, if no rate is applicable, 2% above the rate applicable
to ABR Loans).
	 
	Rate and Fee Basis:

	 	All per annum rates shall be calculated on the basis of a year of 360 days (or
365/366 days, in the case of ABR Loans the interest rate payable on which is
then based on the Prime Rate) for actual days elapsed.












 



PRICING SCHEDULE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable	 	Level I	 	Level II	 	Level III	 	Level IV	 	Level V	 	Level VI
	Margin	 	Status	 	Status	 	Status	 	Status	 	Status	 	Status
	 
	Eurodollar Rate
	 	 	0.50	%	 	 	0.625	%	 	 	0.75	%	 	 	1.0	%	 	 	1.25	%	 	 	1.75	%
	ABR
	 	 	0.0	%	 	 	0.0	%	 	 	0.0	%	 	 	0.0	%	 	 	0.0	%	 	 	0.25	%
	Commitment Fee
	 	 	0.085	%	 	 	0.10	%	 	 	0.125	%	 	 	0.15	%	 	 	0.20	%	 	 	0.30	%
	Utilization Fee
(when usage exceeds
33 1/3%)
	 	 	0.125	%	 	 	0.125	%	 	 	0.125	%	 	 	0.125	%	 	 	0.125	%	 	 	0.25	%







     “Level I Status” exists at any date if, on such date, the Borrower’s
Moody’s Rating is A2 or better or the Borrower’s S&P Rating is A or better.



     “Level II Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower’s Moody’s Rating is
A3 or better or the Borrower’s S&P Rating is A– or better.



     “Level III Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status or Level II Status and (ii) the Borrower’s
Moody’s Rating is Baa1 or better or the Borrower’s S&P Rating is BBB+ or
better.



     “Level IV Status” exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status, Level II Status or Level III Status and
(ii) the Borrower’s Moody’s Rating is Baa2 or better or the Borrower’s S&P
Rating is BBB or better.



     “Level V Status” exists at any date if, on such date, (i) the Borrower has
not qualified for Level I Status, Level II Status, Level III Status or Level IV
Status and (ii) the Borrower’s Moody’s Rating is Baa3 or better or the
Borrower’s S&P Rating is BBB– or better.



     “Level VI Status” exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.



     “Moody’s Rating” means, at any time, the rating issued by Moody’s
Investors Service, Inc. and then in effect with respect to the Borrower’s
senior unsecured long-term non-credit enhanced debt securities.



     “S&P Rating” means, at any time, the rating issued by Standard and Poor’s
Rating Services, a division of The McGraw Hill Companies, Inc., and then in
effect with respect to the Borrower’s senior unsecured long-term non-credit
enhanced debt securities.



     “Status” means Level I Status, Level II Status, Level III Status, Level IV
Status, Level V Status or Level VI Status.








 


2


     The Applicable Percentage shall be determined in accordance with the
foregoing table based on the Borrower’s Status as determined from its
then-current Moody’s and S&P Ratings.



     The credit rating in effect on any date for the purposes of this Schedule
is that in effect at the close of business on such date. If at any time the
Borrower has no Moody’s Rating or no S&P Rating, Level VI Status shall exist.



     If the Borrower is split-rated and the ratings differential is one level,
the better rating will apply. If the Borrower is split-rated and the ratings
differential is two levels or more, the applicable rating shall be one level
below the higher of the Moody’s or S&P Rating.